Date Set for Largest Oil and Gas Lease Sale in U.S. History
The U.S. Department of Interior has set the date for the nation’s largest oil and gas lease sale.
In support of President Donald Trump's “America-First Offshore Energy Strategy,” Deputy Secretary of the Interior David Bernhardt announced that the Department will offer 77.3 million acres offshore Texas, Louisiana, Mississippi, Alabama and Florida for oil and gas exploration and development on March 21, 2018. The sale will include all available unleased areas in federal waters of the Gulf of Mexico.
Lease Sale 250, scheduled to be livestreamed from New Orleans, will be the second offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022. It will include about 14,776 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters).
The lease sale terms include stipulations to protect the environment and include fiscal terms that “take into account market conditions and ensure taxpayers receive a fair return.” These terms include a 12.5 percent royalty rate for leases in less than 200 meters (656 feet) of water depth, and a royalty rate of 18.75 percent for all other leases.
The Bureau of Ocean Energy Management estimates that the Outer Continental Shelf contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered technically recoverable gas. The Gulf of Mexico Outer Continental Shelf, covering about 160 million acres, has technically recoverable resources of over 48 billion barrels of oil and 141 trillion cubic feet of gas.
Earlier last week, Trump decided against an earlier proposal to stop sharing oil revenues from offshore drilling with states along the Gulf of Mexico. In the budget plan released this past week, the White House preserved the revenue-sharing agreement, which was expected to deliver $275 million to Texas, Louisiana, Alabama and Mississippi this year. The money is used to protect the Gulf coastline including infrastructure, hurricane relief and erosion protection.
In January, the government released a draft offshore leasing plan that would have allowed drilling in nearly all federal waters. However, the plan received widespread criticism with almost all coastal governors expressing their opposition.